The current strong demand for vehicle lightening from the automobile sector requires flat carbon steel manufacturers to develop new advanced grades capable of fulfilling the increasingly stringent technical requirements of this market. Two basic approaches are possible: - short term strategies for incremental improvements in the mechanical properties of existing products which can then be produced in thinner gauge strips with equivalent functional properties, - longer term solutions involving the development of breakthrough products such as ultra high strength ductile austenitic steels or low-density steels alloyed with light elements (Al, Mg, Si). Arcelor is actively pursuing both these avenues of research. Restricting the discussion to the second point, it is clear that there are many technical hurdles and conflicting requirements to be overcome in order to produce a marketable product. Arcelor Research, in conjunction with TKS, has recently developed an ultra high strength Fe-Mn-C austenitic steel with excellent formability for automotive applications. The X-IP TM 1000 steel composition is optimised to provide the best compromise in ultimate tensile strength (>1000 MPa) and total elongation (>50%) at room temperature. These properties are achieved through the optimisation of the TWIP (TWinning Induced Plasticity) effect by careful control of the stacking fault energy (SFE) and the final microstructure. The austenite matrix is fine grained (grain size <10 µm for hot strips and <3 µm for cold strips), contains little or no cementite and is exempt from martensitic transformations under cold working. The steel can be processed on conventional industrial lines (continuous casting, hot and cold rolling and continuous annealing) in a wide range of formats. In this paper we present the factors that determine the choice of composition (phase stability diagrams and SFE modelling) and we describe the evolution of the microstructure at different stages in the production process. The relationship between the microstructure and the final mechanical properties is discussed. X-IP